Monthly Archives: September 2014

Scarred for life

We are products of the world around us. Over time our experiences and the people who surround us shape and mold us into ourselves. Often these experiences and moments include turning points, inflections that redirect our worldviews for the rest of our lives. The world we experience during our adult formative years often becomes the […]

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Room for error

The huge news in the financial universe right now is that legendary “Bond King” Bill Gross, who founded and built PIMCO into the global leader of fixed income investing, has left for Janus funds.  Gross will be running an uncontrained strategy at Janus, and I imagine there will be other products launching behind that. The […]

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Exploiting Behavioral Finance

Behavioral finance is all the rage.  Ever since the release of Daniel Kahneman’s “Thinking, Fast & Slow” and Dan Ariely’s “Predictably Irrational“ and a dozen other books like them, we are all ready and excited to admit that human aren’t the number-crunching automatons the Efficient Market Hypothesis made us out to be. Many people in the industry felt entitled […]

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Really Expensive Beta

Investors, advisors, fund companies and the rest of Wall Street are always looking for a silver bullet.  Always.  We just can’t help ourselves.  We desperately need to believe that their is a better way to invest than our current strategy, regardless of our current strategy.  Right now (September 2014) it is pretty easy for investors […]

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How should you build a portfolio?

In this recent piece I discussed some of the shortfalls with relying on a mean-variance-optimization (MVO) technique to build an investment portfolio. In short, MVO relies on too many user-provided inputs to arrive at an accurate “efficient” portfolio for the future.  So if MVO is flawed, is there a better way?  I think there is […]

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